Instead of receiving that nice tax refund check (or direct deposit) you’ve been expecting, you get a notice in the mail. It tells you that your tax refund has been offset. What exactly does this mean?

Well, a refund offset means the government has determined that you owe a debt and has applied your tax refund towards that debt. Now, tax refunds can be offset for many types of debts through the Treasury Offset Program (TOP). This post will address some of the questions that one commonly has after an offset occurs.

When is a debt sent to the Treasury Offset Program?

In most cases, your name can be sent to TOP if your debt is more than 90 days delinquent. The government agency must then determine that your debt is valid and legally enforceable. The agency will then send you notices about your debt and provide you with opportunities to resolve or dispute your debt. They must also respond to questions and inquiries regarding your debt. If you have not received a notice about your debt, the first step you should take would be to call the agency to which you owe the debt and talk to them.

How do I determine if I have an offset or who I may owe?

To determine if your Federal tax refund has been, or will be offset, it is best to contact the TOP. They can be reached at 800-304-3107.

What types of debt does an offset cover?

Even if you don’t owe the IRS money, your federal tax refund can still be offset through the TOP. Your refund may be seized to pay the following types of debts:

State income tax debt

Federal non-tax debt (such as delinquent federal student loans)

Past-due child support

Certain unemployment compensation debts. You should receive a notice that tells you which agency is getting the money from your tax refund check. If you don’t agree with the refund offset or want to work out a payment arrangement, you’ll have to contact the agency listed on the notice. The IRS won’t be able to help you if your debt is not federal tax debt.

How does an offset for a Federal tax debt work?

If you owe the IRS money, say for a previously unpaid balance on an older year, then know that they they will seize your tax refund check. There’s no way around this. Even while you are making payments as part of an installment agreement, the IRS may continue to seize your tax refunds and apply them towards your outstanding balance.

The IRS has the right, and the ability, to offset all future tax refunds until 1) the balance is paid in full or 2) the tax debt is no longer enforceable. You can read this post from our sister site on just how long the IRS has to collect on unpaid tax debt.

What if the refund offset was for my spouse’s debt?

If you file a joint tax return, your full refund can be seized when your spouse owes any of the debts listed above. However, you generally aren’t legally responsible for debts your spouse incurred prior to your marriage, so it is possible to request relief from part of the refund offset.

In order to do this, you can claim an injured spouse allocation to get the portion of the refund you are entitled to receive. You can either file an injured spouse allocation along with your tax return or after you receive notice that your refund has been offset.

Also note that in the future, you can simply file your return as Married Filing Separately. This will keep your refund separate from that of your spouse, and it will not be used to pay for any of their outstanding debt.